By RailPAC President Noel T. Braymer — This seems the right time of year to reflect on what new rail service we have to look forward to and to dream about new projects. I’m writing about my own personal choices, though I’m sure many share some of my dreams. We have many projects to look forward to. There is light rail service being extended on 3rd St. in San Francisco in 2006 as well as RT light rail service to the Amtrak Station in Sacramento. The SPRINTER between Oceanside and Escondido will be running by 2008. By 2009 the GOLD LINE will be extended from LAUS out to East Los Angeles. Metrolink will see service extended to Perris and half-hourly service in Orange County by 2009. By 2010 the EXPO LINE will be running from Culver City to downtown Los Angeles. Also in 2010 the Dumbarton rail bridge will reopen connecting the Bay Area between the Peninsula and the East Bay. All these projects stared out as a dream.
What I would most like to see are major upgrades on the Coast Line between Los Angeles and San Jose. This is needed to improve service and on time performance for the COAST STARLIGHT, PACIFIC SURFLINERS, METROLINK, future commuter service in the Santa Barbara area, direct rail service to Monterey and CALTRAIN service to Gilroy. Ridership on the PACIFIC SURFLINERS and connecting bus service north of Santa Barbara has shown there is strong demand on the Coast Line for passenger service between Los Angeles and San Francisco. I’d love to see a minimum of three Bay Area to Los Angeles trains on the Coast Line. This would include a fairly fast morning departure from both ends, a mid-day COAST STARLIGHT and an overnight train. Few services could serve more of California as a whole than service along the Coast. But before this can happen, the Coast Line needs major upgrading.
Something which will work well and is very “doable” would be to extend CAPITOL/SAN JOAQUIN service to Reno and to Redding out of a hub at Sacramento. Sacramento is a natural connection point. Coordinated service greatly expands ridership while controlling costs. That’s why the airlines have run hub and spoke operations for so many years.
A personal favorite of mine is to extend Metrolink on the old Santa Fe Harbor Line in Los Angeles. This would bring rail service from downtown Los Angeles to LAX, the South Bay and Harbor Areas of Los Angeles County which have little or no service now. Since this rail line is publicly owned, rail service can be opened in a very short time and at a very modest amount of money. Combined with the extension of the Green Line up to Century Blvd. and the LAX area, these two services will feed traffic to each other giving passengers multiple travel options to and from the LAX area. I want to mention that this service would parallel both the Santa Monica and San Diego Freeways in the areas that are the most congested in Los Angeles! (NOTE: See Mr. Braymer’s article and airport/rail photo in the Archives section of this website.)
Speaking of Los Angeles, a mere mile and a half of new trackage will greatly improve transit there. I’m talking about a downtown connector which would connect the Blue Line at 7th and Flower to the Gold Line’s East Los Angeles extension at 1st and Alameda. This will eliminate some annoying transfers while making others much easier. It can also open up the Bunker Hill area of downtown to rail transit.
Coming down for a moment back to the present, what is holding back most projects is money, or rather the lack of it. Rail spending has been stagnant in the state the last few years. Much progress has been made because as ridership on state services has grown, the extra income has made it possible to expand some service. But several good projects will need major funding before there is a chance they can begin. The state’s budget deficit is finally starting to balance as the economy has improved. Now is a good time to think about more rail construction funding. For example Los Angeles to Las Vegas service seems like a natural. The problem is the Cajon Pass is already congested with ever increasing harbor traffic. The railroads don’t say if, but when more tracks will be built in the pass.
Los Angeles to Palm Springs and further to Phoenix and Tucson, Arizona rail service is long overdue.. The problem again is increased harbor traffic. A flyover is badly needed to separate the UP over the BNSF at Colton crossing. The UP is trying to double track the entire Sunset route. Until the route to at least Palm Springs is largely double tracked it is unlikely that there will be more passenger trains.
Perhaps the greatest dream is direct service between Bakersfield and Los Angeles. The problem is the Tehachapi loop. There is growing traffic from the north going through the loop headed east on both the UP and BNSF mainlines. It is more realistic to talk about a new alignment for faster San Joaquin Valley to Southern California rail service than to try to fix the current line. This is not to say we won’t have these projects. But it will take longer and harder dreaming.
By RailPAC President Noel T. Braymer — There were lots of news stories along with misinformation over the action of the Amtrak Board this late September. (For the full story read the accompanying news report from the Bureau of National Affairs) The Amtrak Board created a new Amtrak subsidiary comprised of the entire North East Corridor. This move is primarily for accounting purposes in order to discover the true costs and revenues of the NEC compared to the rest of the national system. The need for this action can be traced back to research by former RailPAC officers, the late Byron Nordberg and Dr. Adrian Herzog in the 1980’s. They with others discovered substantial evidence that Amtrak’s accounting was spreading the high overhead costs of the NEC to the rest of the national system, particularly the long distance trains. Doing this hides the costs of the NEC while making it look like long distance trains require hundreds of dollars of subsidy per passenger carried. A Federal Railroad Agency study concluded that excluding depreciation and allocated costs the direct cost’s of Amtrak’s long distance trains were only 73.5 million dollars in 2003. Separating the NEC costs from the rest of the national system was one of the recommendations made by the Amtrak Reform Council back in 2002.
The NEC is a busy, aging, expensive and critical rail link for this country. Not only is it a busy Amtrak Corridor, but it is an even busier commuter rail link to several east coast cities as well as a freight carrier. Of the 27 billion dollars Amtrak has received since 1975 from the Federal Government, over 20 billion has gone towards the NEC. Regardless of whether Amtrak or the North Eastern States own the NEC infrastructure in the future, there will continue to be a need for federal money to maintain the NEC. Government pays for the infrastructure of roads, ports and airports too. The question that begs to be asked and answered is how much is needed to be spent for what levels of service? The NEC is not the only major rail line carrying Amtrak, commuter and freight service which will need federal money. Why should California which has spent 3 billion dollars to improve rail passenger service receive almost no federal help, when so much federal spending has been spent between Washington, New York and Boston? The same question could be asked about other states.
A better understanding of the income and expenses of Amtrak can lead to a more efficient and productive rail service. This could translate into some people losing their jobs, which may be why some people fear any changes in the status quo. As of April 2005 Amtrak was down to 19.590 employees. Amtrak has lost employees recently largely because of the cancellation of commuter contracts in Boston and Los Angeles. But Amtrak still has 1,495 executives and 4,211 administrators, over a quarter of the remaining workforce. Amtrak only has 3,427 conductors and train engineers. A large portion of Amtrak’s white collar workers work on the NEC.
A major headache in operating the NEC is the mixture of dense local commuter traffic with faster express trains. Speed is very sexy, but also very expensive. Speed requires more energy was well as higher track and equipment standards. Speed also tears up track and equipment faster creating high maintenance costs. It is also very difficult to operate express trains mixed with slower local traffic. That is why most high speed rail service is run on dedicated trackage separate from local traffic.
Amtrak has spent close to 4 billion dollars on the ACELA. The most recent shut down of ACELA service the spring and summer brought to light that the ACELA was no faster than the Metroliner trains it replaced. But the ACELA operating costs are much higher than the Metroliners. Like most of the NEC trains that Amtrak runs on a rail line they mostly control, the ACELA’s are on-time roughly 75% of the time, well short of the expected 90%. Despite fears that loss of the ACELA’s would be a financial disaster, Amtrak ended the fiscal year with a cash reserve. ACELA may well cost Amtrak more than the revenues it brings in. Loss of ACELA may have saved Amtrak money. This would not be the first time that Amtrak’s accounting predictions came up wrong. Every time Amtrak has cut back Long Distance service to “save money”, Amtrak instead has lost even more.
By discovering the true costs of the NEC a debate can finally begin over the share of the cost’s created by the different users of the NEC, and what they should pay. Should there be more freight to bring in more income? Are the commuter operators paying their fair share of the NEC costs? Are the commuter operators satisfied with the service they get from Amtrak? Is the income from faster express trains enough to cover their higher costs? These questions and answers may upset some people. But good information is the key to any sound policy and an efficient Rail Passenger service.
Reproduced with permission from Daily Report for Executives, No. 198, pp A-8 – A-9 (Oct. 14, 2005). Copyright 2005 by The Bureau of National Affairs, Inc. (800-372-1033)
Amtrak Board’s Decision to Create New NEC Subsidiary Not a Break-Up, Laney Says
By Derrick Cain
A decision by the Amtrak Board of Directors to create a subsidiary to operate Amtrak’s Northeast Corridor only amounts to a separation of finances, and does not signal a break-up of the nation’s financially-beleaguered passenger rail system, Chairman David M. Laney told BNA Oct. 13.
Laney confirmed that the board voted “unanimously” at a closed Sept. 22 meeting to approve a resolution directing the Amtrak management to “take all appropriate action to create the NEC Subsidiary.”
The board’s resolution states that “the creation of the NEC Subsidiary and the transfer to it of the NEC Infrastructure is undertaken for purposes of facilitating and furthering future capital investment, financing, development, oversight and operation of the NEC Infrastructure with the intent to enhance the performance and capacity of the NEC Infrastructure for the benefit of the Corporation and all current and future users of NEC Infrastructure.”
The resolution further directs Amtrak to complete all actions before a January meeting of the board.
While the announcement sent shock waves through Capitol Hill and among Amtrak stakeholders, Laney told BNA he believed “people are overstating” the resolution’s purpose. “Amtrak is still totally under control [of the NEC],” Laney said. “This is a fairly basic step.”
NEC Assets to Be Separated.
Laney said the action allows for an actual separation of the assets of the NEC corridor, but leaves the Amtrak management structure intact. “It adds a level of credibility and transparency to both sides,” Laney said.
Laney said he was unsure of the exact vote count of the board on the resolution, because board member Jeffrey Rosen, who represents Secretary of Transportation Norman Y. Mineta, may have abstained from the vote. The other two members, Floyd Hall and Enrique Sosa, voted in favor of the resolution. Still, Laney characterized it as a “unanimous” vote.
Decision Contrasts With Past Stance
Ross Capon, executive director of the National Association of Railroad Passengers, said the decision sharply contrasts from the board’s anti-split position in its April 2005 “Strategic Reform Initiatives and FY06 Grant Request.” That document said that “the board and management have extensively explored a number of recommendations calling for the NEC infrastructure to be moved into a separate entity. We have also reviewed models for such a structural split adopted and implemented in other countries with varying degrees of success. This step in the overall reform process remains an option for continued review. We have decided for now, however, that the costs, complexities and risks of such a split within Amtrak outweigh the benefits. Consequently, we have concluded that separation of NEC assets from NEC operations is not advisable at this time.”
Capon told BNA that the board’s latest move is a “prerequisite for a complete break-up [of Amtrak.” “This is a huge step,” Capon said.
Capon also criticized the board for not announcing the vote ahead of time, or even after the vote. He speculated that it was “leaked” to a group that would handle the issue sympathetically.
Group Explains How It Found Out
The United Rail Passenger Alliance, a rail policy institute based in Jacksonville, Fla., announced the board’s decision in its weekly e-mail report on Oct. 12. URPA President Bruce Richardson told BNA that he received the information through a “former government official.” Richardson did not identify the individual but confirmed that it was not Rosen.
Then, Richardson told BNA that he sent an e-mail to a “high-level Amtrak” official and said he received a “friendly” confirmation. He would not name that official, other than to say that it was someone “higher” than Amtrak President David Gunn.
Richardson, whose group routinely criticizes Amtrak, said the board may not have wanted to make the announcement sooner because “they didn’t want to send creditors into a tizzy when there’s nothing to worry about.”
Further, Richardson said the decision was “not confidential, not a secret” and “they weren’t trying hard to hide it.”
‘No Ulterior Motives.’
Laney said there was “no ulterior motives” in how the information became public and said the resolution had been on the board’s agenda “for some time.” “We just got around to it then,” Laney said.
Still, it appears not even lawmakers knew the board was contemplating such a resolution, and expressed concern aboutnot being made aware.
Rep. Corrine Brown (D-Fla.), ranking member of the House Transportation and Infrastructure Committee’s Railroad subcommittee, would “question why the board would make this decision without telling Congress,” according to Brown’s legislative director Nick Martinelli.
“She’s adamantly opposed to carving out the NEC,” he said.
Rep. Steven C. LaTourette (R-Ohio), chairman of the House Transportation and Infrastructure Committee’s Railroads subcommittee, said that it is “too early to tell” whether the board’s action is a positive move for Amtrak.
“Amtrak is going to have to seek enabling legislation and I’m sure we’ll have plenty of questions for Amtrak,” LaTourette said in an Oct. 13 e-mail.
Lawmaker Wants Public Explanation
Rep. Robert Menendez (D-N.J.), a member of the same subcommittee, wrote a letter to Laney Oct. 13 asking for an “immediate public explanation” of the “secret” vote. “It appears that, in the absence of public support, the administration is now trying to use its hand-picked board to take steps that have never been approved by nor explained to Congress,” the letter said. “Your decision to hold the vote in secret and shield the outcome from public scrutiny only reinforces the conclusion that this administration has no commitment to rail service in this country or to the riders that depend on it.”
Menendez said unless Laney explains the board’s actions, he will ask the subcommittee to hold hearings into the actions when Congress reconvenes the week of 17.
Menendez and others believe that the board’s decision closely tracks portions of the administration’s Amtrak reform plan released in April, which seeks to essentially privatize the system (73 DER A-10, 4/18/05 ). They say the move also reflects the administration’s very public attempt to “zero out” Amtrak’s fiscal year 2006 budget, except for operating money for the NEC.
Laney, however, told BNA that he “is the author of this thing.”
“It’s truly unrelated to the administration’s plan,” Laney said.
Laney also noted that he has said in the past that the “risks of separation of the management outside of Amtrak outweighs the benefits.” That, he said, is different that what the resolution directs Amtrak to conduct.
Brian Turmail, spokesman for the Department of Transportation, would not comment on an “accounting move.”
“The board is responsible for changes in its accounting practices,” Turmail said. “Our position is that Amtrak must reform.”
Amtrak Expert Applauds Move
Thomas A. Till, managing director for the Cascadia Center for Transportation and Regional Development and former member of the Amtrak Reform Council, said the board’s move is “an excellent decision.” “It’s making two lines of business clear,” Till said.
Several rail stakeholders say the division would stop the practice of Amtrak using money made on trains in other parts of the nation to be used to fund the NEC.
“This new development for the NEC is a huge victory for those who believe in fiscal transparency for Amtrak,” the URPA said in its newsletter. “No longer will Amtrak be able to cascade hidden NEC costs onto the long distance system. No longer will trains in California unwittingly help pay for costs associated with unrelated NEC expenses.”
Amtrak said it would not comment on the board’s decision.
By RailPAC President Noel T. Braymer — The key to major reductions in our Oil use is transportation, since 65% of our Oil consumption is used for transportation. New York City on a per capita basis uses about half as much gasoline as the national average; the reason is rather obvious, as New Yorkers drive less and use a great deal of public transportation. The same is true of most major European cities. Expanding transit and more importantly planning development around transit, commuter and intercity rail will greatly cut back on car use.
Let’s not forget freight. Many rail mainlines are already congested. They will need improving to carry more traffic. With track improvements we can carry more freight by rail on containers and trailers on flatcars (TOFC) that are now carried by truck while saving fuel and reducing pollution. To be competitive with trucks such service needs to be on par for speed and on time performance with good passenger service. Upgrading rail lines for better service will benefit both passenger and freight service.
Another factor in the future will be alternative fuels. There is energy in waste products from farms and the lumber industry that can be made into fuel. The United States also has a lot of coal, much more coal than oil. Does this mean going back to coal burning steam locomotives? How can you fill up on coal for your car? What you can do with coal is reprocess it to get methane gas while separating out the soot and other pollutants found in coal. Methane basically is the “Natural Gas” most people have in their homes. The technology for getting methane from coal is over 200 years old and is how the gas for 19th century gas lights was made. Gasoline, diesel and gas turbine engines run very cleanly and well on methane.
One problem with using methane is as a gas it requires heavy tanks and is difficult to transport. Liquid fuel is much easier to ship and use. Well methane can be turned into a liquid fuel. This was done in Germany during World War II . Coal was turned into methane and then into gasoline. Qatar is a small Persian Gulf country with a great deal of Natural Gas (methane) but has been unable to sell it because it is impractical to build a pipeline to customers. Starting next year Qatar will be selling liquid diesel fuel made from methane. The fuel is so clean it’s clear .
No doubt you are worried about global warning and pollution as well you should be. Massive coal mining creates problems and swapping equal oil use for methane from coal is hardly a solution. The future belongs to hybrid vehicles. A hybrid vehicle can be a car, bus, truck or locomotive that runs both on electricity from a battery and a fuel powered engine be it gasoline, diesel or gas turbine. No doubt you’ve heard a great deal of talk about in the future cars will run on hydrogen with fuel cells. What you may not have heard is the designs for fuel cell cars are also hybrids, requiring a battery with the fuel cell acting as a generator. Also the hydrogen is expected to come from coal.
We now have hybrid cars that get around 50 mile to the gallon. This is better than the 20-30 mpg of most cars, but the extra expense of a hybrid is rarely paid off from increased fuel savings. What would you think of a car that gets over 200 mpg? Impossible?, well it has been done. An off the shelf hybrid car was modified with extra batteries and the ability to have its batteries charged when parked. This turned a gasoline powered car with some battery assist into a mostly electric car with a gasoline engine for back up, giving the vehicle almost unlimited range. We don’t have to wait for fuel cells in the unknown future before saving a great deal of energy while still maintaining a high standard of living.
No doubt this won’t be popular with the oil or auto industry. Both make their profits from extravagance, not economy. There will be claims that charging batteries won’t save energy. But that isn’t true. There are electrical shortages during times like hot days. But at night demand is lower and electricity is available and the cost of charging batteries is far lower on a per mile basis than gasoline. The problems to saving energy are not technological, they are political. Many of the problems we have now could have been avoided with a little planning. Even if alternative fuels cost $10 dollars a gallon, if one gallon is a full tank that’s a lot less than what people pay today. Wouldn’t it be nice to be self-contained as far as energy? This means a much lower trade deficit, less pollution, less greenhouse effect gases, inflation would be under control and people would have more money to spend on other things beside oil.
By RailPAC President Noel T. Braymer — One of my earliest memories as a child was going to Los Angeles from our home in Orange County to watch the Dodgers play baseball at the Los Angeles Coliseum. This was back in the late 1950’s. What I remember most about that night, my first in the “Big City,” was seeing Streetcars for the first time. They scared the daylights out of me. I was very young and I think their size and the crackle of sparks from the trolley poles on the trolley wire is what scared me. But they made a lasting impression.
As I grew up I remember the conventional “wisdom” that Streetcars were “out of date” and that “they got in the way of cars and held up traffic.” This was in the post World War II era when there was massive road building. The hope was that if enough roads were built, traffic congestion would go away. It was also hoped that new, broader and straighter roads would mean safer roads. Well, neither turned out to be true. We now know that more roads cause people to drive more. The urban sprawl created from road building spreads out housing, jobs and shopping so people drive more, creating more congestion. The new roads proved little safer than the old ones. Wider, straighter roads encouraged drivers to go faster and drive more aggressively, which often caused more serious accidents. The latest fad in Traffic Engineering is “Traffic Calming.” Traffic Calming narrow roads and create twists and turns to force drivers to slow down and make roads safer.
A problem with private automobiles is they take up a great deal of valuable space usually carrying just one person on public roads. As you can see in a photo (above) published by the Pacific Electric in 1952, one bus can easily hold as many people as almost a city block full of cars. Now fast forward to today. The Los Angeles MTA Blue Line now has over 75,000 boardings a day during the work week. The Blue Line runs every five minutes during rush hours and runs in city streets for two miles in Los Angeles and two and a half miles in Long Beach. Each Blue Line train has three cars for a total of 228 seats. A single Blue Line train carries the same number of seats as six 40 foot buses, in less space and with only one operator. Those 228 passengers represent roughly four lanes of cars almost two football fields long bumper to bumper if they were in cars. If we talk about standees, which is the norm in rush hour, the reality is far greater.
Street running with Light Rail today is best done with a dedicated median clear of other traffic. While there are accidents while street running, they are usually minor and the fault of the motorists. Serious accidents with Light Rail are usually at grade crossings on private right of ways. Getting use of a dedicated median is not always easy. First are the complaints of traffic congestion if a lane is lost to private vehicles. As I have already shown, street running increases a road’s ability to carry people better than double decking the roads. When trying to widen a street to fit in a median usually means eliminating street side parking. If there are merchants on a street, they will fight to the death to save “their” parking which is next to their store.
In America parking is usually “free,” but never cheap. Like a “free lunch,” someone is always picking up the bill. Providing “free” parking for customers and employees is a major business expense, which is passed on to customers and employees. When considering land values and construction costs, a space in a parking structure is usually worth more than the car parked in it. Rail Transit can save money by reducing parking demand while bringing more people to work shop, and to visit in a region. Two good examples of this are the downtown Baseball stadiums in San Francisco and San Diego.
It goes without saying that it is hard to find parking in San Francisco. SBC Park couldn’t function without nearby Muni Metro and CalTain service. Some people will say “that’s San Francisco, [it] couldn’t work anyplace else in California.” When Petco Park was being planned in downtown San Diego, the naysayers screamed it was a terrible idea. “Downtown is already too congested for a ball park, the traffic will be terrible and THERE WON’T BE ENOUGH PARKING! “The San Diego Trolley was a central part of the planning for Petco Park. The result is, a significant number of people ride the Trolley and Coaster to games, so parking and traffic has not been a problem. But downtown merchants and restaurants are happy with the new walk-in business on game days.
The best reason for looking at more street running is the cost. An old rule of thumb is for the cost of building on the surface, elevated construction costs three times as much while subway construction is ten times higher than on the surface. Subway construction is now over 300 million dollars a mile; elevated construction is around 100 million a mile; [and] building on the surface is about 30 to 40 million a mile. Many critical connections for light rail projects are put off because of high construction costs for fancy grade-separated solutions. To get the most out of public roads, light rail transit is the best use, not private cars.
The Board of Directors of RailPAC, the Rail Passenger Association of California, enthusiastically endorses the bipartisan SB 1516. (Full text on Thomas at the Library of Congress)
- Its official title, beyond Senate Bill 1516, is the Passenger Rail Investment and Improvement Act of 2005. Some call it PRIIA 2005, and others are simply calling it the Amtrak reauthorization bill.RailPAC: This bill indicates that a national Amtrak system is here to stay, and must be made more robust and healthy. Corridors are OK, but Amtrak is a national passenger railroad, not a regional railroad serving only a handful of states.
- “Amtrak To Continue To Provide Non-High-Speed Services – Nothing in this Act is intended to preclude Amtrak from restoring, improving, or developing non-high-speed intercity passenger rail service.”RailPAC: That means that Maglev, Acela, and other proposals are not the sole hope nor future for Amtrak or passenger rail service in this country.
- The creation of a schedule of penalties by the Surface Transportation Board that will be assessed against the long distance train host freight railroads if the railroads fail to handle Amtrak trains by a minimum set of standards. The penalties will be designed to “fairly reflect the extent to which Amtrak suffers financial loss as a result of host rail carrier delays or failure to achieve minimum standards, and will adequately deter future actions which my reasonably be expected to be likely to result in delays to Amtrak.”RailPAC: While this means the host railroads will have to act responsibly, this also correctly puts a huge burden on Amtrak to maintain its locomotives and rolling stock in such a manner that breakdowns will not occur out on the railroad main lines, nor terminal delays will occur because a train has not been properly inspected for dispatching. This provision alone could do more to improve relations between Amtrak and its host railroads than almost any other concept.
- The bill encourages (but does not mandate) the Amtrak board of directors to develop an incentive pay program for Amtrak employees.RailPAC: This moves the company further away from acting like a government agency and more like a private business, and also would help attract a better class of employee.
- S. 1516 sets authorization for Amtrak capital and operating expenses and state capital grants, all separately. The amounts are specified for what goes where, and defines uses for the amounts of federal monies.RailPAC: This has a real chance of finally bringing some accountability of where and how federal monies will be spent, without the muddying of waters when Amtrak in the past has shifted designated monies around like pieces on a chess board.
- This bill allows current Amtrak President and CEO David Gunn, and his successors, to run a company that is not burdened with past debt mistakes that were the fault of his predecessors and the extremely poor stewardship of past Amtrak boards of directors.
- Excess Railroad Retirement payments are also addressed as separate federal monies.RailPAC: This needs to be a separate amount that does not have anything to do with the operating grant amount.
- S. 1516 calls for the establishment of an improved financial reporting system. The bill says the Amtrak board of directors “shall implement a modern financial accounting and reporting system that will produce accurate and timely financial information in sufficient detail – (A) to enable Amtrak to assign revenues and expenses appropriately to each of its lines of business activity, including train operations, equipment maintenance, ticketing, and reservations; (B) to aggregate expenses and revenues related to infrastructure and distinguish them from expenses and revenues related to rail operations; (C) to allow the analysis of ticketing and reservation information on a real-time basis; and (D) to provide Amtrak cost accounting data.”RailPAC: Greater transparency, consistency and honesty in Amtrak’s internal accounting procedures can only help the Amtrak Board make better informed investment decisions, including where to invest generous levels of federal capital support to achieve the highest possible returns on investment measured by transportation output and passenger ticket revenue, per dollar invested.
- The Amtrak Board of Directors is expanded to 9 qualified members, including the President of Amtrak and the Secretary of Transportation (or his staff member designee).RailPAC: This seems a political move, especially since there is a provision that no more than four members of the board may be members of the same political party. A provision is also noted to attempt to provide balanced representation of the major geographic regions of the country served by Amtrak. In other words, no more stacking the board with NEC representatives.
- A small provision calls for a $5,000,000 expenditure for grants to Amtrak and states participating in the Next Generation Corridor Train Equipment Pool Committee for the purpose of designing, developing specifications for, and initiating the procurement of an initial order of one or more types of standardized next-generation corridor train equipment and establishing a jointly-owned corporation to manage that equipment.RailPAC: We urge this provision not encourage designing new cars from the ground up, but to modify and modernize currently available off-the-shelf equipment.
- Relief for the states that have been paying Amtrak to operate state-supported trains is included in this bill. All state contracts will be created under similar criteria, and no state will pay more than another for basic train services, including food service cars.
- An independent auditor is directed to establish methodologies for Amtrak route and service planning decisions, including new routes, existing route expansions, and possible elimination of existing routes.RailPAC: Also addressed are concerns for performance, cost recovery, on-time performance and minutes of delay, ridership, onboard services, stations, facilities, equipment, connectivity with other routes, needs of communities for transportation, and the methodologies of other countries which have passenger rail service.
- Similar criteria are established for developing a separate annual performance improvement plan for the long distance system that includes a host of information, such as data on sleeping cars and diners.RailPAC: The end result of this, is that the FRA will hold Amtrak accountable for routes that are not improved internally by Amtrak, and may withhold federal monies designated for these routes. This will help the national system to stop being the stepchild of Amtrak, and force management to focus on the huge potential of the national system versus the constant and wrong focus on the corridors and the NEC.
- S. 1516 addresses how the NEC capital funds shall be spent in an orderly fashion, and also establishes a Northeast Corridor Infrastructure and Operations Advisory Commission plus a Safety and Security Committee.RailPAC: For the first time, there will be a seat at the table for everyone who is a stakeholder in the NEC.
- Money for state grants, at 80% federal funding, follows a long, but rational process. Just about every contingency is accounted for, and the availability of grants going back to projects in 2004 and 2005 is included, hoping to help states that started projects on their own initiative.RailPAC: California, and any other state that has invested its own funds, could be adversely affected because budget constraints have not allowed new capital spending in those two years. Therefore, we WITHHOLD full endorsement of this provision pending its resolution.
RailPAC urges its members to convey their support for SB 1516 to Senators Boxer and Feinstein, as well as their Congressional representatives.
By RailPAC President Noel T. Braymer — The July 7th bombings of London transit has set off a wave of panic, which is just what the bombers wanted. There are calls to spend massive amounts of money to increase security on all forms of public transportation, comparing the situation to security at the airports. Yet even the pundits admit that Israel, the most security conscience nation on earth hasn’t been able to stop bombings on their buses. These bombings are not random acts of thoughtless violence. British Prime Minister Tony Blair’s popularity even with his own Labour Party was hitting an all time low. He hoped to shore up his image by hosting the G-8 economic conference in Scotland. That way he could be seen with rock stars promoting help for impoverished African counties. Bombing London while this was going on was a way to rain on Mr. Blair’s parade. The train bombings in Madrid in March 2004 were timed just before the Spanish National elections. Their purpose was to weaken an already unpopular Prime Minister because of his support of American involvement in Iraq. It is unlikely that Al-Qaeda will be bombing Fresno anytime soon.
Security is very important for public transportation. It saves lives, for example on the train tracks. It saves money in reduced legal liability and vandalism. It encourages ridership, because safety is a major factor in how people decide to travel. But turning every train station and bus stop into mini-airport terminals will be massively expensive. It will turn people away from public transportation by slowing travel time, and will come from money needed to expand service. The main problem is such a knee-jerk reaction distracts us from the underlying cause of today’s terrorism: OIL!
The problem is our continuing dependence on oil, and the instability of the counties we depend to supply it. We now import 58% of our oil. Some 42% of our energy consumption comes from oil. The U.S. burns 45% of the world’s production of gasoline. We use 60% of our oil consumption for transportation. The United States has about 2% of the world’s total oil reserves. There has not been a major new oil discovery since 1962. Current oil reserves are expected to last about 60 years.
Oil prices are increasingly unstable. Saudi Arabia has admitted that it will have difficulty meeting current demand. There is increasing evidence that the most productive oil fields in Arabia are starting to dry up. Arabia should be a wealthy country. If you are a member of the Saudi royal family, you are wealthy indeed. However, Arabia has a population of 22 million with about 6 million foreign workers. Official unemployment is around 13%, but including women in the workforce, the unofficial unemployment rate is between 24 to 30%. There is a great deal of poverty and hostility in Arabia to the royal family. In turn the royal family is increasingly dependent on the United States to stay in power. This may explain why much of the leadership and money for Al-Qaeda comes from Arabia.
What’s the worse that could happen? Perhaps we could look at Iran. We depended on the Shah of Iran as our ally. He depended on us to stay in power. Officials in Washington were caught off guard when his regime was overthrown by revolution. Our relations with Iran are still far from normal. If we do nothing, or continue as we are, things could get very ugly.
What we could do – and should have done – is to raise taxes on gasoline and “gas guzzlers.” We should raise the minimum fuel efficiency of new cars, and rebuild and expand the national rail network for both expanded freight and passenger service. We could lower fares on buses and trains, which would be justified in saving fuel and dollars being sent overseas. There are many transit projects waiting for funding. Perhaps most importantly we should encourage construction of affordable housing that is well served by transit and commuter rail, and close to jobs and shopping served by transit and rail. If these things were easy, they would have been done long ago. But would you prefer an armed security officer on every bus with a bomb sniffing dog? That is assuming there is any fuel left for the bus.
Rail Passenger Association of California Board of Directors, Adopted June 4, 2005.
In the interest of national security and the provision of alternate forms of transportation, RailPAC endorses, with some reservations, the “Amtrak Strategic Reform Initiatives and FY06 Grant Request,” calling for “rebuilding America’s Passenger Rail System,” as submitted to the Congress by the Amtrak Board of Directors, its Chairman David Laney, and President David Gunn in April, 2005.
By now most every passenger rail advocate knows Amtrak now faces a different type of crisis, and one larger than those that have come before. While “passenger rail” has broad support in the country, “Amtrak” has become a target, and solutions are not limited to just a lack of funding. Amtrak is said to be on the verge of bankruptcy, but it is counterproductive for this idea to be widely circulated. The threat of a shutdown if it does not get its budget request is not helpful to its preservation now.
RailPAC always favors continuing passenger rail where it is economically viable. We vigorously support the California state rail program. But, for 20 years we have been critical of Amtrak’s financial records that tend to make the long distance trains’ performance look worse than it really is. We support national reforms that will make passenger rail more fiscally viable, that reveal the real costs of running these important long distance trains, and that show the drain on the national system of the costs of running the Northeast Corridor (NEC).
We have reserved endorsement on the proposed changes to the Railway Labor Act and the placement of new employees under Social Security. Those points must be decided in the negotiation process.
Below are listed the ten main points of the Amtrak Reform Plan as submitted by Chairman Laney and President Gunn in April, and RailPAC’s comments follow each.
- Adequate funding for Amtrak in FY ’06. Amtrak has requested $1.82 billion for fiscal year ’06, including $787 million for capital infrastructure projects, $560 million to support train operations, $278 million for service on existing debt, $175 million in working capital and $20 million for transition costs for the reforms. Last year Amtrak received $1.2 billion in federal money to spend above the $2 billion in tickets it sold.RailPAC: Of the $787 million, almost all of it goes to infrastructure it owns in the NEC, but that is not pointed out publicly. Both the NEC and the long distance trains deserve fair support for current and future needs.
- Establishment of a federal capital grant program for state investment in intercity passenger projects, 80% federal, 20% local match. There is no such program currently.RailPAC: We favor this action. California currently pays far more than the 20% local match, so this new program must not cause California any disadvantage in entry to the program. Interstate highways now receive up to 88 % federal match.
- The federal government through Amtrak would be responsible for bringing the NEC up to a state of good repair. It is politically unthinkable that the affected states will do this on their own or in conjunction with each other, or agree to any such concept.RailPAC: We favor this action, but there must be fully transparent accounting of assignment of these costs to NEC and state supported intercity services.
- Amtrak would remain a vertically integrated company, i.e., corridor maintenance would not be separated from operations.RailPAC: Maintenance costs not associated with the ownership of the NEC are fine to charge to the trains that run on it, just as are costs associated with running the California corridors. We oppose charging the long distance trains for corridor related infrastructure costs when they are paying the freight railroads access charges. We also support more train level responsibility rather than total centralized control.
- Amtrak would retain its five businesses: state corridors, long distance trains, NEC operations, infrastructure and ancillary businesses.RailPAC: We agree, as long as the costs for one are not secretly charged to the others except for common overhead costs. Transparency is vital here, so a total revelation of the $3 billion costs of the Acela program would be highly desirable, for instance, as would be a thorough review of NEC operating practices involving multiple trains serving the same markets too often, resulting in low load factors.
- Performance targets would be set for long distance trains, and those requiring more subsidy than these standards would also require additional state or federal subsidy, or be discontinued.RailPAC: We support this concept as long as there is no cancellation of trains that fail to meet the criteria immediately. We do NOT support charging the states for the operation of “national system” long distance trains under any circumstances other than for stations and related items. We support two kinds of criteria: 1) passenger related standards (cleanliness, food service and quality, and on time performance) and 2) fiscal criteria, looking not just at ridership, but at revenue passenger miles (to reflect trip lengths) and revenue, and an honest list of costs of operation. Each federal dollar invested in the long distance markets produces several times more revenue and transportation “output per dollar invested” than any dollar sunk into the short corridor markets. Amtrak must redirect a much larger share of available investment capital towards the long distance markets that have consistently sold-out trains.
- Changes to the Railway Labor Act.RailPAC: We RESERVE a blanket endorsement of this element, but we WILL NOT SUPPORT any changes to on board staffing of trains that have the potential to affect the safety of the trains and a high level of service for passengers. We believe there are opportunities for improving both economics and work conditions. Any work rule changes must be thoroughly vetted through the negotiation process and be fair to the affected employees as well as the company.
- Place new employees under Social Security rather than Railway Retirement.RailPAC: We RESERVE a blanket endorsement here, too, as it will have a major affect on the future of the Railway Retirement program. This must be fully coordinated with that agency, the affected freight railroads, and railway labor.
- The Plan envisions that there would be a growth in competition in the industry for both services and possibly operations. The states would become the purchaser and have the right to select the most efficient operator.RailPAC: We support this concept for corridor operations, but ask, “Can a private operator do it for less and provide more and better service?” The competition factor should be tested first on a new corridor operation and where it has the support of the freight railroads.
- Amtrak’s debt of some $3.8 billion would be assumed by the federal government, thereby removing the need for nearly $300 million in annual debt service.RailPAC: We support this idea, as politically challenging as it may be on top of its budget request for next year. Amtrak should never find itself in this kind of debt again.
By RailPAC President Noel T. Braymer — In the wake of Amtrak’s increasing financial problems, there has been increasing pressure on Amtrak to cut costs. The Government Accountability Office (GAO), Congress’s investigative arm, thinks it has found an area ripe for cost savings in Amtrak’s Food Services. Food service has long been a target of cost cutting for rail passenger service. To save money back in the 1960s, the Southern Pacific experimented with vending machines to replace diners, which brought howls of protest. The Superliner diner was originally designed around a traditional crew of 11. Today, the Superliner diners make do with about half that number. Inventory control has been and continues to be an issue with food service.
The concerns that RailPAC has on this issue are twofold. First is Amtrak’s accounting. The GAO most likely came up with their cost numbers by going through Amtrak’s books. The problem is that because of their accounting methods, Amtrak can’t tell anyone what their true costs are. Amtrak accounting has evolved from systems it inherited from the freight railroads when they ran passenger service prior to Amtrak. American railroad passenger accounting has many strange flukes. What it was often most useful for was inventing major loses for passenger trains to justify permission from the government to eliminate service. Before Amtrak can really save money, it must reform its accounting system to find out what its real cost are.
At the heart of the problem with Amtrak’s accounting is its “Route Profitability System” (RPS). Amtrak knows how much it spends. What it can’t tell you is what it really costs to run a specific train or its food service on different trains. Instead Amtrak arbitrarily assigns what it thinks is the share of its costs to different trains and services. The basis for assigning costs is proportional to revenues! In other words the more money a diner brings in, the more it costs, and the more money it loses!
Here is a analogy of what would happen if someone tried to run a business the way Amtrak does. Let’s say you are an aspiring business tycoon. First you get yourself a big office, office equipment, and a salary for yourself and a secretary. Your business consists of two hot dog carts. Everything about the two carts is the same, except one cart is selling all its hot dogs every day before the end of the day. The other cart always has food left over that ends up being thrown away. The cart that is selling out is doing twice as much business as the other cart. Your accountant, who is using RPS accounting, will tell you that the first cart is costing twice as much as the second cart. Well, frankly, you are losing lots of money. Using the data from his RPS accounting your accountant tells you the way to save money is to shut down the hot dog cart that is always sold out because of its “high costs.”
You do what your RPS accountant tells you to do– so what happens? You save money on your avoidable costs like food and wages. But you still have your rather high fixed overhead costs for your office, secretary, the bank payment for your now unused hot dog cart, and your own salary. Plus you have lost the revenue from the busier cart. Of course you didn’t “save money”- you’re in worse shape than before. In a nutshell this is the problem Amtrak faces every time it uses RPS data to “save money” by cutting back service. The RPS data creates “high costs” for passenger trains while hiding the costs of Amtrak’s massive overhead. It is the source of ammunition for the critics of Amtrak over what are truly phony figures.
The other issue RailPAC has about food service is that it is critical on trains, particularly long distance trains. When people are on a train from 8 to 48 hours they have to eat. The RPS accounting is already biased against the long distance trains because they bring in more income, therefore have “higher costs.” Major degradation of food service could greatly reduce ridership on the long distance trains and cripple Amtrak’s best source of income. What does it cost the airlines for food service? Who knows? It is included in the airfare and considered part of the cost of doing business.
Amtrak’s biggest problem is not the cost of the operation of its trains, but rather its massive overhead, which has to be supported with a skeletal system of passenger trains. It should be understood that Amtrak was not created for the benefit of the traveling public. Amtrak was used to bail out the bankrupt PennCentral Railroad and to insure that as it was reorganized as Conrail that it could be profitable. To do that the expensive and unprofitable parts of the PennCentral were dumped on Amtrak. These included New York Penn Station, Chicago Union Station, Beech Grove maintenance facility, Sunnyside yard on Long Island, and most of the North East Corridor, among other property. Much of the expense that RPS puts onto the national system comes from Amtrak’s massive overhead “inherited” from the PennCentral. Using RPS hides the true cost of this excessive overhead and makes services like trains or food service look exceedingly expensive.
Just how flexible are Amtrak’s definition of costs? Let’s look at the old San Diegan. For six fiscal years, from 1987- 88 to 1992- 93 the San Diegan made a slight “profit” on operations, but not capital. Starting in 1993-94, Amtrak negotiated a change in the formula on how Amtrak’s cost’s were figured with Caltrans for the San Diegans. In 1992-93 the San Diegan’s “cost” was $13,254,709. After only modest expansion of service by 1997-98, the “cost” was $44,769,723 with a farebox recovery of 33.9 percent!